Fairness Mechanisms

Fairness mechanisms are protocols or rules implemented by exchanges to ensure that all participants have an equal opportunity to trade. This includes preventing front-running, where someone with advance knowledge of an order places their own order ahead of it to profit.

In decentralized exchanges, this often involves batching transactions or using commit-reveal schemes to hide order details until they are finalized. In centralized exchanges, it involves fair queuing systems and transparency in how orders are prioritized.

Fairness is essential for maintaining market integrity and trust. Without these mechanisms, participants may feel the market is rigged, leading to reduced participation and liquidity.